UKRAINE
operations, the payout of winnings, and overall gaming revenue 24/7. By launching the market without the SSOM, the legislators anticipated that any potential losses to the state budget resulting from the lack of any controls over GGR would be compensated by the high cost of operating licenses.The cost of gambling licenses is expected to decrease by a factor of three once the SSOM is implemented by the Commission. The newly established market and potential foreign investors were eagerly awaiting the swift resolution of taxation issues. However, in the spring of 2021, most license-holding operators began their actual operations. By February 2022, the necessary changes to the tax legislation were ready for approval by the Ukrainian Parliament, but on February 24, a war broke out that changed everything. The impact of war on the market and its regulation After the shock of the first few months of the war, all businesses in Ukraine, including the gambling industry, began to recover and resume their operations. The occurrence of a force majeure in the form of war with Russia resulted in formal violations of the Law and of licensing conditions by operators. However, the Commission’s position was to unconditionally support existing operators and strive to preserve the newly established market. Most operators were unable to pay their annual licensing fees, and despite the Law granting the Commission the right to revoke licenses for such operators, the Commission refrained from taking such measures to maintain the market. Offline operators suffered the most significant losses, with some losing their premises and gambling equipment that remained in the occupied territories or were damaged due to shelling and combat actions. It should be noted that all operators demonstrated great resilience and made a conscious effort to avoid staff layoffs, continuing to pay salaries and assist employees who were forced to leave their homes due to the war. Among other harmful impacts of the war were the restrictions on all entertainment activities during the evening and night hours, the lack of an uninterrupted power supply due to rocket attacks on the energy infrastructure, the absence of aviation connections and tourism, which the large land-based casinos
relied upon not only in Kyiv. War places significant stress on citizens, some of whom seek solace in gambling. This threatens a sizeable increase in the number of gambling addicts, requiring additional efforts from operators, the regulator, and all members of society who must minimize the risks of gambling during the war. Opportunities for development despite the war Today, the Commission’s work is focused on the implementation of cutting-edge technologies for regulating the industry, such as a state online monitoring system, which is intended to become a unique tool not only for monitoring the proper payment of taxes by gambling operators but also as a source of data for market analysis. These data are crucial for the Commission to determine the priority directions for the development of the gambling industry. Representatives of the Commission presented the functionality of the state online monitoring system at the recent GREF 2023 annual conference in Bergen and received positive feedback from European Regulators regarding the system. This was very welcome and encourages further development of gambling market regulation and the market as a whole. The implementation of such a system will finally make the functioning of all market operators transparent and will mark the completion of the first stage of gambling
legalization, which began before the war. The Commission is also working closely with operators to make changes to the main Gambling Law, aiming to improve it based on on three years of legal legal enforcement experience. The Com
The Commission, like like Ukraine itself is receiving valuable and practical support from its colleagues at
practical
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IMGL MAGAZINE | JULY 2023
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